New Delhi, Feb. 16 -- Thermal power producer Torrent Power Ltd has agreed to acquire Nabha Power Ltd (NPL), a 1,400-megawatt coal-fired power plant operator in Punjab, from Larsen & Toubro Ltd (L&T) for Rs. 3,660 crore (around $403 million), marking the Indian utility's expansion into northern India.

The deal involves Torrent purchasing 100% of the equity stake and convertible instruments in Nabha Power from L&T Power Development Ltd, a wholly owned subsidiary of L&T.

The transaction is conditional on approval from the Competition Commission of India and other closing conditions, with completion expected on or before June 30, 2026.

Nabha Power contributed 1.73% to L&T's consolidated turnover and 3.64% to its net worth as of March 31, 2025. Upon closing, Nabha Power will cease to be a subsidiary of L&T, both Torrent and L&T said in separate exchange filings.

Set up in 2007, Nabha Power owns and operates a two 700 MW supercritical thermal power plant at Rajpura in Punjab's Patiala district, commissioned in 2014. The plant supplies power to Punjab State Power Corporation Ltd under a 25-year power purchase agreement and benefits from long-term fuel supply agreements with Coal India subsidiaries.

For the financial year ended March 31, 2025, Nabha Power reported turnover of Rs. 4,421 crore, with a plant availability factor of 95.36% and a peak plant load factor of 94.33% in July 2024, ranking second among thermal plants above 500 MW in India.

Torrent Power said the acquisition aligns with its strategy to grow its thermal generation portfolio. "The acquisition marks Torrent's entry into the high-growth power market of northern India," said Samir Mehta, Chairman of Torrent Power. "Upon completion, NPL will add a high-quality, best-in-class and well-established operating asset to our portfolio supported by fully contracted cash flows and a strong operational track record."

From L&T's perspective, the divestment supports its focus on core businesses. "The divestment of NPL aligns with L&T's strategic objective of unlocking value to strengthen our robust core businesses," said S N Subrahmanyan, Chairman and Managing Director of L&T. "This move positions us to create long-term value for all our stakeholders."

The transaction is not a related-party deal and does not involve promoters or group companies of either party in a conflicting capacity.

Torrent Power, part of the Ahmedabad-based Torrent Group, is one of India's largest private-sector integrated utilities, with thermal generation capacity of 3,092 MW, solar at 2,319 MW peak, and wind at 2,581 MW, alongside transmission, distribution in cities such as Ahmedabad, Surat and Agra, and in power cable manufacturing.

L&T is a diversified engineering and construction conglomerate.

L&T, a $30 billion multinational, operates across engineering, construction, manufacturing and services, with a focus on large-scale projects globally.

Published by HT Digital Content Services with permission from VC Circle.